Which of the following is a disadvantage of cost plus pricing?

Cost plus pricing involves calculating the total cost of producing a product and then adding a markup to determine the selling price. One major disadvantage of this pricing strategy is that it can lead to prices that are higher than what the market will bear. If the markup applied is significant, the final price might not be competitive compared to similar products offered by competitors. This can discourage potential customers from purchasing the product, especially in markets where consumers are price-sensitive or where alternatives are readily available at lower prices. Consequently, while this method ensures that costs are covered, it does not take into account how much consumers are willing to pay, potentially jeopardizing sales and market share.